China: Christie's to open auction house

New York Times

Updated 11:00 pm, Tuesday, April 9, 2013

Photo: Justin Tallis, AFP/Getty Images

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TOPSHOTS An employee of Christie's auction house poses with a complete sub-fossilised Elephant Bird egg in London on March 27, 2013 during a press preview of their April 'Travel, Science and Natural History' sale. This pre-17th century egg of the extinct Elephant Bird, the largest bird ever to have lived, is approximately 100 times larger than the average chicken's egg and is estimated to fetch 20,000 - 30,000 GBP when it goes on sale on April 24, 2013. AFP PHOTO / JUSTIN TALLISJUSTIN TALLIS/AFP/Getty Images

TOPSHOTS An employee of Christie's auction house poses with a complete sub-fossilised Elephant Bird egg in London on March 27, 2013 during a press preview of their April 'Travel, Science and Natural History'

Christie's auction house said Tuesday it had been granted a license and was set to become the first international auction house to operate independently in China, which has already overtaken the United States as the world's largest art and auction market.

The move allows Christie's to sell directly to a growing class of wealthy collectors in China, many of whom have been spending huge sums of money in recent years to buy fine art, wine, watches, jewelry and other items at auctions around the world.

Sotheby's and Christie's have been operating in Hong Kong for a long time, and have seen their business explode in the city, which is governed independently.

But the world's two biggest auction houses have long sought greater access to mainland China to cultivate collectors, hold auctions and compete with China's own formidable auction houses, Poly International and Guardian, two state-run entities that have recently moved into the ranks of the world's biggest auction houses.

Now, Christie's has signed its own agreement with the city of Shanghai and plans to hold its first auction this fall, though the company said the agreement restricted Christie's from dealing in cultural relics.

The company can operate throughout China but will be based in Shanghai and pay taxes there.

Last year, revenue in China's art and auction market was about $4.5 billion, down sharply from $9.3 billion in 2011, when the market was blistering hot.

But China's homegrown auction houses have also been plagued by fakes, smuggling and long-standing suspicions of price manipulation.

Analysts say Sotheby's and Christie's hope to capture a share of the market and compete by promising higher standards for authenticating and evaluating art and other collectibles.